RPT-Century Aluminum takes power issue to Kentucky lawmakers

NEW YORK, March 10 (Reuters) - Kentucky state lawmakers are
set to decide whether to let U.S. aluminum producer Century
Aluminum Co buy power on the open market in its bid to
save its money-losing smelter in the Bluegrass state from
closure.

With metal prices low and production costs high, U.S.
aluminum producers struggle with razor-thin margins. In its
attempt to cope, Century has taken the dramatic step of pushing
for legislation that would exempt smelters from a state law
requiring consumers to take power from only one supplier.

"We're losing money every month. What the bill would do is
get me out from under that exclusive service contract," said
Michael Early, Century's energy director, in testimony last
month to Kentucky's House Natural Resources and Environment
Committee.

The bill could have bigger implications for the troubled
U.S. aluminum industry, where high-cost electricity for aging
plants has challenged many producers to seek ways to operate
more efficiently, especially as benchmark aluminum prices have
come down by more than 30 percent in less than two years.

Century's drive for the legislative change coincides with
Ormet Corp's filing for bankruptcy protection at its
Ohio aluminum facility, crippled by high costs.

Reuters data shows U.S. aluminum output has fallen by 20
percent over the past decade to 2.03 million tonnes last year,
and the number of smelters has dropped by more than 30 percent
to 10 plants over the same period.

At current aluminum prices, close to 4.3 million tonnes of
production outside of China is unprofitable, according to
Barclays base metals analyst Nick Snowdon. That is about 8
percent of global output.
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